Archive - Dec 15, 2009

A pension fund for fire and police officers has sued the board of Goldman Sachs, seeking to stop the investment bank from paying out billions of dollars in bonuses to the bank's staff. Will larger public pension funds join in on the lawsuit? I wouldn't count on it...

Uh, so remember when we were, like, gonna buy $7.5 billion in Citi stock? Yeah so, maybe not so much. In fact, since we have you on the phone, how about you pay us $4 billion just because?

Carbon trading is a scam. But soot can be reduced COST-EFFECTIVELY, which not only will do a lot in regards to climate (if the world is warming - see Project Mayhem's writings), but will also be good for the health of those who live in China, India and other areas getting mugged by the gunk.

"Late last week, Nouriel Roubini, the current go-to bubble diviner, published a report entitled, “The New Bubble in the Barbaric Relic that is Gold”. The report is scheduled to be released to the general public tomorrow, December 15. We have read the report and we disagree with its conclusion. In fact, our ongoing analysis indicates gold’s terminal value in this cycle will be multiples higher than current pricing." - QB Asset Management

In a poll on Fox News, with over 163 thousand people voting, the vast, vast majority, or 99% of poll respondents are against raising the debt ceiling, claiming "This out-of-control spending is outrageous and irresponsible." (at least Obama will get time to sneak in another 50-60 stimulus bills before China says "no mas"). We are not sure just how scientific this sampling is, but we would give it the benefit of the doubt with these kinds of numbers. Remember - the Senate is about to raise the debt ceiling from $12.1 trillion to something like $14 trillion. This means that the Senate is about to go against the wishes of 99% of America. How the Administration hopes to moderate the unprecedented political fallout that is sure to follow such an action is far beyond our meager analytical skills.

"Gold is used for many purposes, including as a reserve asset, as an investment, and for use in electronics, automobiles, and jewelry. Thus, fluctuations in the price of gold can reflect changes in demand associated with any of these uses, as well as changes in supply. In monitoring the price of gold, the Federal Reserve must attempt to interpret which of these factors is responsible for its fluctuations at any point in time. One of the ways we do this is by consulting other indicators of market sentiment. A number of measures of expected future inflation in the United States, including measures taken from inflation-protected bonds and surveys of consumers and professional forecasters, have been well contained. Accordingly, increases in the price of gold do not appear to reflect increases in the expected future of U.S. inflation. " - Ben Bernanke

One of the screens that we at Fibozachi continually monitor throughout the Cash session (09:30 - 16:00) is the NYSE TICK.

The hackneyed cliche of "volume precedes price" is certainly true more often than not, however, it is far from foolproof. We prefer to modify this tired cliche by saying that: "buying and selling pressure precedes price."

The snapshots included (from today's session) clearly illustrate how this critical relationship (between the TICK and price action itself) plays out on a daily basis.

More Mutual Assured Destruction from Ber Bernanke: "Without addressing every specific item, I believe that the release of much of the information requested would inhibit the policymaking process or reduce the effectiveness of policy and thus would not be in the public interest."

In other news Dow Jones, New York Times, the Associated Press and Reuters all have enjoined Bloomberg in demanding that Federal Court uphold the previous decision by the NY Supreme Court, seeking the Fed to disclose confidential bail out information.

In this 12.15.09 edition of the Fibozachi Technical Update (FTU), we present you with 15 technical profiles of the BKX - Bank Index, Crude Oil Futures, Natural Gas Futures, the VIX, the US Dollar Index, and IBM common stock ...

The question now: where does the latest batch of good "bailout" news come from?

Is Citi going to be out of TARP after completing the secondary it is trying to get done? No is the answer. But you could have fooled me.

Since there is no volume this week and most players are out of the market for the rest of the year, the Goldman Squid Desk is busy again studying the books of its biggest clients, looking for outsized put or call positions in individual stocks. As usual, we find sudden shanks or unexpected bottlerocket runs as Goldman extracts its usual pound of flesh out of its customers.

With UBS out, and CS to follow, how the hell will the ultra upper middle class continue not paying their taxes?

A month ago Zero Hedge dubbed Gramm-Leach-Bliley the worst Bill ever passed. Its passage, coupled with a bunch of insane money printing leprechauns, presaged the ultimate collapse of Lehman, and was the main reason why capitalism nearly died last year (and why contrary to all you hear, is still in critical care). Yet from mere grumblings a month ago, the chorus of voices calling for a  repeal of G-L-B, and a renewal of Glass-Steagall has reached a crescendo, and today Majority leader Steny Hoyer said that the renewal of the Glass-Steagall act was a distinct possibility.

XOM is the world's best investor in the energy business, and has a multi-decade track record and the returns on capital to prove it. This is undeniable. But, Exxon looks out 20 years when evaluating acquisitions and investments. Natural gas investors should not look too much into this bet, because Exxon's time horizon is longer than most of our careers, and perhaps lives, will be.